SEPP 72(t)
Good Afternoon
Please help with the following case
[b]FACTS[/b]
An indvidual, age 54, took early retirement; receiving his initial pension payment August 1st 2007.
I am being told the annuity payments were structured as a SEPP under section 72(t). Does that sound right?
The indvidual (former Ford employee) is now being offered a lump sum option. He would like to roll the lump sum value to an IRA. Does he have to wait until the 72(t) has been satisfied to proceed with the rollover?
The rules states the SEPP cannot be modificed unntil later of 5yrs or 59.5.
Individuals DOB 7/1/1953 making him 59.5 on 1/1/2013.
Based on this fact pattern the SEPP would be satified on 1/1/2013.
Does he have to wait until the 72(t) has been satisfied to proceed with the rollover?
Permalink Submitted by Alan Spross on Thu, 2012-09-20 22:29
If his 1099R forms have included exception code 2 in Box 7, it must indicate the SEPP exception because the dates you supplied confirm that he separated prior to the year he reached 55 and the age 55 exception would therefore not apply here.
If he wants the lump sum option and it is still available in January, he should postpone the rollover until then.
What is Ford advising former employees on this issue?